Sunday, September 7, 2008
Market Forecast -- week of Sep 8 - 12
New York is coming off a gloomy week as stocks dropped 3% on bad employment numbers and continuing fears that a recession is in the offing. Although I did not foresee the big sell off Thursday, my fears for a negative week were largely realized as the Dow closed at 11,220 and the S&P at 1242. As it turned out the Moon-Sun-Saturn-Jupiter configuration at 18 degrees of their respective signs on Thursday was a reminder of how the perfection of soft aspects can lead to declines as investors seek relief by cashing out. This is not unlike the abundance of similarly soft aspects that marked the 1987 crash.
While there is an opportunity for gains earlier in the week, I think caution is the best strategy here with a number of potentially negative influences coming together for Friday's session. Jupiter turns direct in time for Monday which may create some basis for optimism but the squaring of Mars and Mercury to Jupiter puts that in jeopardy. Venus squares the Moon-Jupiter conjunction on Tuesday so that might be the best chance for a gain this week. By Friday, the Sun opposes unpredictable Uranus while Mercury-Venus-Mars come under the destabilizing aspect of Rahu. This promises to be a high volume session with a lot of volatility and my guess it will be on the downside. The Moon conjoins Rahu that day indicating that investors will be acting more on emotions than reasoned analysis. Much of this configuration is still in effect for next Monday the 15th, so it's going to be a risky time to be in the market. A retesting of the July lows (10,700 intraday) is very likely here, and there is a greater than normal risk of a major sell off down below 10,.500. We may even move below 10,000 depending on how much offsetting upside we have early in the week. An additional factor here is that the Mercury-Venus-Mars-Rahu pattern will activate the natal Saturn in the USA chart. While this needn't directly indicate stock market decline, it likely signifies an event that is significant enough that it will have negative market ramifications. This could be grim and likely the start of another leg down into the bear market abyss.
Mumbai was largely unchanged last week as it gamely resisted the widespread global pullback. The Sensex begins at 14,483 while the Nifty stands at 4352. While I thought Indian markets may have a little more upside movement, this outcome largely confirms the forecast for minimal change. This week looks negative overall, although with a caveat that if New York only moves lower in Friday' session, then the bulk of the fallout may be delayed until next Monday's session on the 15th.
Also, the early week gains may somewhat offset the losses towards the end of the week.
As predicted, Tokyo moved lower last week and the Nikkei stands at 12,212. There should be some decent gains in the early week that may push the market above 12,600. As with other Asian markets, Friday's bearishness may carry over or be delayed until Monday. The Mercury-Venus-Mars will conjoin the 4th house cusp of the TSE chart thus adding extra punch to the move down.
Shanghai is also coming off yet another bad week and opens at 2202. Transiting Ketu continues to have its way with the Mercury-Jupiter conjunction of the SSE Composite chart. Towards the end of the week the transiting Sun falls under the aspect of the natal Rahu thus providing the probable spark for selling. Shanghai is likely to follow other global markets lower in this move.
I was spectacularly wrong on the Euro last week as it continued to move downward and closed at 1.4267. Certainly, the Euro is on the way down in the medium term and is likely headed for par with the US dollar. The decline will likely continue this week particularly as the Mercury-Venus-Mars comes to the natal Mars in the Euro chart. 1.40 is possible.
Oil fell sharply last week in the wake of the brief spike above $117 brought on by hurricane Gustav. While I had expected falling prices later in the week, particularly after the separation of the Sun-Saturn conjunction, I was surprised by the extent of the decline back to $106. Last week's action gave support to the notion that Saturn is the significator for Oil and the Sun's combustion is an affliction that tends to bring prices down. I think there won't be too much more downside this week, as prices should stay above $100 intraday. Look for gains to accrue midweek so that we may see some trades at $110 at some point. Given the recent inverse relationship between crude prices and equities, it is tempting to think that Oil will move up with Friday's likely down move. I'm not sure that will be the case this time, however.
Gold also moved down sharply last week and opens at $802. I had thought there would be more upside in the early going, but the negative influence of Saturn on the Sun predominated throughout the whole week. Gold may bounce back a little in the early week, perhaps to $820 as transiting Venus conjoins the natal Jupiter in the GLD chart. The end of the week is harder to figure with the Sun-Uranus opposition although I think the downside risk is larger than upside potential. Gold is in bear market territory so the default bias is negative, particularly with transiting Saturn moving into exact opposition to the natal Jupiter in the Futures chart. There's a very real chance of a wholesale sell off here towards the $780 support level. More cautious traders looking for a rally would be better advised to wait until next week and after.